What is the difference between leasehold and freehold?

What is freehold?

You surely often hear that someone bought house freehold. That is the most spread method of buying houses. When you are freeholder of property that means that you are fully in charge of that property. That further means that you can do almost anything with your property without asking for permission anyone, except in particular occasions. You also don’t have to pay leasehold ground rent.

What is leasehold?

When you are leaseholder of some property it means that you own that property for duration of contract you signed. After contract ends, you have several options. You can either buy freehold, or you can just move out. Of course there is thirds option, too, you can choose to extend your contract, but most of people choose to buy freehold if it is possible. When you are leaseholder it means that you have to pay leasehold ground rent and that you have to ask freeholder for permission to change anything in property. This is the most used way of buying flats; also one reason for it is because you cannot buy freehold of flat. But there is another solution for that.


Commonhold is conceptualized to help flat owners to share full ownership over their building. So they don’t have to lease a flat. This is based on next principle. Everyone inside the building agree to make kind of company, they give the name to the company and then they buy freehold of the whole building and in that way they share freehold of the building. It is important to not think about commonhold as owning a share of freehold. It sounds similar but there are some significant differences.